Eroton Remains Operator of OML-18, Says Management

Peter Uzoho

Eroton Exploration and Production Company Limited has reiterated that it remains the Operator of OML-18 in line with the provisions of the JOA, adding that any dispute whatsoever between the parties are reserved exclusively for resolution under the Dispute Resolution clause of the JOA.

The management of the company, therefore, stated that actions of the other JV partners (NNPC and Sahara) remain illegal and run contrary to the rule of law and in total breach of the terms and conditions stipulated in JOA.

In a statement by the company signed by the Managing Director of Eroton, Dr. Emeka Onyeka, Eroton stated that the company as the operator of OML-18, remains committed to transparency, integrity, and due process, and urged the public and stakeholders to disregard, “any misinformation as we continue to operate in compliance with all applicable laws and regulations. This statement is necessitated by the false information recently disseminated in the media on the status of operatorship of OML-18 and about Eroton Exploration and Production Company Limited.”

“In complete breach of the terms of the Joint Operating Agreement (JOA) governing OML-18, and with total disregard for due process, the non-operators of OML-18; NNPC Limited (NNPC) and Sahara Field Production Limited (Sahara) (now known as OML 18 Energy Resource Limited) appointed a company, NNPC Eighteen Operating Limited as operator of OML-18,” Onyeka said.

He added that Eroton, which was validly appointed Operator of OML-18 via a legal and contractual process involving all the participating entities in the JOA, “has approached the relevant courts to defend its legal rights.”

According to him, “In addition to this, Eroton has issued Notice of Arbitration to NNPC and Sahara in accordance with the terms contained in the JOA. On the basis of the lack of any grounds for the purported takeover of operatorship in accordance with the terms of the JOA governing the block, lack of due process and flagrant breach of the rule of law, Eroton has taken considered legal opinion to the effect that the status quo ante continues to remain the position and same will be upheld by the courts of Nigeria.

“This is despite any contrary public statements by any entity, in the interim period. If this action taken by NNPC and Sahara is allowed to persist, it poses a threat on all the JOA’s in Nigeria involving both multinational and indigenous oil and gas companies, because due process with regard to dispute resolution has not been followed.

“Thus, there can be no removal of an operator without following the laid down procedures and processes in Article 2.4 of the JOA. The process is designed in such a way that notices requirements cannot be waived and the removal of operatorship cannot be carried out without following the process provided in the JOA.”

He said Eroton took over operatorship of OML-18 in 2015 with a meagre production of 6,000 bbls/d and increased production to over 50,000 bbls/d of dry crude (75,000 bbls/d of gross liquids) within a period of less than 24 months.

“This was considered a spectacular achievement at the time by both the NNPC, the Department of Petroleum Resources (DPR) (now NUPRC), and the entire industry. Eroton, as operator, was also recognised by NNPC as being one of the two JV operators with the lowest technical cost per barrel in the industry over the time period, ”he said.